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tv   Mad Money  CNBC  October 10, 2013 6:00pm-7:01pm EDT

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>> shipping. absf. arkansas's best. i'm in this name on the long side and i didn't vote for tim. and mike, i disagree with you completely. i will be right on netflix. end of story. >> we are jon. >> we're still awaiting word from the white house as the president meets with republicans. meantime, "mad money" starts right now. my mission is simple, to make you money. i'm here to level the playing field for all investors. there is always a bull market somewhere, and i promise to help you find it. "mad money" starts now. hey, i'm cramer. welcome to "mad money." welcome to cramerica. other people want to make friends. i'm just trying to make you a little money. my job is not just to entertain you, but to educate and teach you. so call me at 1-800-743-cnbc. the debate changed and so did the coloration of the market. instead of talking about the woes of the bondholders from wall street, president obama and his people began to talk about the worries of the pensioners,
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the widows, the elderly and the doctors on main street. a whole new address and a totally gift gambit. that's how stocks reported high with the dow climbing 223 points, s&p shooting up 2.8% and the nasdaq soaring 2.6%. the democrats have listened and addressed wall street's concerns about what happens to bondholders in the event of the treasury default. oh, no, what would the big hotshot wall street bond owners do when their precious interest didn't get paid? the chinese, who own $1.2 trillion back and forth of bonds get fed up with us and dump their holdings? >> sell, sell, sell! >> eventually causing interest rates to go higher. ooh. really scary. i was amazed this was the size of the debt ceiling ledger the democrats seemed to care about. think about it. you imagine less sympathetic characters than the gangster bankers who took the bailout, lined their pockets and aren't in jail.
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don't we actually want to stiff those guys? [ buzzer ] or how about the chinese? those rap patients capitalist communists who steal our jobs, kploout pollute our skies? don't we want them to come here big hat in hand and say sorry, better luck next time it? was a nightmare pitch for the democrats. i couldn't believe it. it was terrific fodder for tea party, for that whole wing of the gop because these two bond holding constituent groups are so hated. the tea party was killing not one, not two, but three dirty with one stone. big blow to government, chinese robbers and wealthy wall street scofflaws led by jamie dimon, two of the richest people in the world. in the last 48 hours we had a total change in the discourse. the democrats no longer worried about the sanctity of the bond market who use goldman sachs to lord over our poor little nation. no. the democrats are worried about the people, the people who benefit from bonds being sold. those on social security, those who serve in the military, and those who are covered by
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medicare, pensioners. hey republicans, you don't let the debt ceiling and 80 million checks on you. 80 million checks don't suddenly get sent out to your voters -- i mean your constituents. you don't issue more bonds, doctors don't get paid. you fight the democrats and you're telling the people on main street to eat cake. the tea party is being thrown by none other than marie antoinette. let them eat gato. they were defender of main street. were no longer advocates for interest. they were attackers of their own voters. the president's man invoked the third rail of american politics and suddenly the house leadership, instead of being unseated by the tea party recognized that they could lose the house entirely. but as much as the citizenry wants small government, they want small government for the other guy, because no one can touch social security or medicare and live to tell about it, or at least get re-elected. the interest wasn't wealthy payments for the rich anymore. it was food and shelt foreinterest small person, the job creators and the middle
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class. that's how you get enough reconciliation to get a deal that allows us to once again focus on the fundamentals. ooh, the fundamentals, pesky dpluls. that's what we need to address now. there are so many hedge funds caught short today that they still haven't finished covering or buying their shares back. they keep hoping for speaker boehner to send the market down with angry glares. stick to it the house leadership. they keep hoping for the peace pipe to break, or someone could smoke ricin-laden cigarettes. put steak-tainted stevia in their could of fee. it didn't happen. yes, this market was exactly as i feared when i urged you to stay the course, because i figured that no one would be able to get out and get back in again there was no gain without pain. even if the pain was pretty unbearable, wasn't it? now, it's possible that something break downs between today because the republicans blocked 80 million checks to the people of the united states, not to mention the united states of beijing and goldman sachs.
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what's more important is earnings season is upon us. the euphoria of the moment will likely not spill over into the conference calls we're about to start hearing. that's because washington tasered the whole economy. think thank you klaus klein field from alcoa who used that term. let's take the two biggest sectors in the market. first, tech. i struggle to find an area of tech i'm not worried about. hewlett-packard, sure. meg whitman said reassuring things that amounted to hey, we're not going away. but no one denied pc sales are not going away. they are. micron did a big purchase of a japanese company. last niall night we heard from citrix that business had slowed. >> ooh! >> that's reminiscent of when cloud play red hat disappointed. hey, hey, you, you, government, get off my cloud stocks. these companies have huge business. have you noticed that the government has been shut down for, i don't know, ten days? we were supposed to like telecommunications stocks, but we have research today that
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verizon is slowing sales. not good. that's an awful lot of large sectors of the economy that can't be counted on to deliver. we're going to hear a quarter where mortgage rates spiked big. do you think that's a recipe for making the numbers? plus, until the debt deal is signed, sealed and delivered, why allow numbers to go up? how about retail? retailers around the nation were doing poorly before the events with a. do you think someone worried about their social security check was out there buying a lot of cashmere sweaters? a business that is bad has probably gotten worse, right? . no it definitely got worse. take a look at gap stores. looks like old navy is sinks, banana republic slipped on a peel. l brands, formally known as the limited closed down on an up 300 plus day? what about the oils? we love the independent oil companies, and i've got more on that later. a announcement from chevron last night. exxon probably has one more disappointing growth quarters. it's possible package stories have come down a bit and they
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could bounce. more than that, i don't know. frul pharmaceuticals? merck announced a job cut that brought the stock up for a day. now it's back below the announcement. sure, the industrials and aerospace names could be good, but a government shutdown has hurt the earnings badly. here is the bottom line. 48 hours ago, the western world was in the bounce. never forget while stocks can go back and forth as a group for a couple days, we're now in earnings season. once that deal is done, really done, we're going to stuck with what washington did to those earnings. they tase erred them. believe me when i say the government will have generate in order downsize surprises than we have heard for many a quarter. enjoy the short rally while it lasts. it doesn't help the outlooks that in the end determine whether you're going to make or lose money in the stock market. zack in south carolina. zack? >> caller: hey ya, jim. big boo-yah from clemson.
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>> can't wait for that florida state game. what's going on? >> caller: we're going to run them dead in florida state. >> go noles. >> caller: real roller coaster. >> no, no, no. acadia, we're in the ring register mode. we had a nice run, and we're no longer going to say the head-hot biotechs should be owned for good. we're taking a little profits because in the end, we've got big gains, and we are not hogs, and we're not going to get our head cut off. what a difference a day makes. really, it looks dark, right? but a whiff of compromise and everything is fine. not so fast! sure, enjoy the rally while it lasts, please. but earnings season is upon us. and we can hear the pain that washington has given us when we listen to the gap and to l brands. and we know that things aren't good out there. stay with cramer. ♪ coming up, mandatory testing. biotech stocks have been the lifeblood of the market this year. but after some very healthy gains, is it time to take profits? or will they continue to thrive?
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don't miss cramer's prognosis. and later, d.c. drama. >> it's time for these negotiations and this conversation to begin. >> the market went on a wild ride today as the news out of the nation's capital jolted stocks. tonight cramer is turning to homegrown energy solutions to find out how they can keep you flying high for years to come. plus, the right fit? while investors put retailers back on the rack, the company behind clothing brands fors between to working women seems to be fashionable again. cramer is trying on ascena retail group in an exclusive with its ceo. all coming up on "mad money." don't miss a second of "mad money." follow @jimcramer on twitter. have a question? tweet cramer, #madtweets. send jim an e-mail to
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madmoney@cnbc.com. or give us a call at 1-800-743-cnbc. miss something? head to madmoney.cnbc.com. you know throughout history,
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44. what a fabulous, wonderful, no bad very good day. one where our politicians finally seem like they might do the right thing on the debt ceiling. and what happened? stocks roared in response. >> hallelujah! >> this kind of move is a big reason why i've been telling you over and over again stay the course. that's it. i also think this is maybe the most perfect, genuine moment for a special -- >> sell, sell, sell! >> sell block on some of our absolutely favorite companies here on "mad money." [ crying ] >> because you can now sell them into strength. i'm talking about the smaller, more speculative biotech outfits, outfits because bulls make money, bears make money, and hogs, that's right. after having some incredible runs this year, i think it's time to ring the register, ka-ching, ka-ching, make the
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point. on pretty much of the bioteches that are smaller than $10 billion. you heard me. you need to think of these small tech biocap names as being gamblers in a casino, and they're all playing the same game. they're playing fda roulette. consider the newly minted insys therapeuti therapeutics. up 450%. acadia pharma up. nps farmer. 264%. people, these are lifetime moves. the speculative bioteches have done even better than their larger breath threaten. celgene, the four horsemen of the big pharma apocalypse they have rallied respectively. the demand for these stocks is so heavy that in 2013 we have seen the most biotech ipos in 13 years. and the ipos have given you some
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incredible out-performance. and that worries me. it is never that good, people. but when you have tiny speculative drug companies that are up this much, it would be pure foolishness to stay at the table and keep playing fda roulette. you know what? people say a bell never goes off. wrong. i'm ringing the bell. [ bell ] this could be more lethal to your wealth than the russian roulette. if you don't get out, and the getting is really good right now. you know, it's worse than foolish not taking any profits here. it's pure greed. it's the kind of greed that does indeed cause the slaughterhouse that i'm trying to avoid here. why am i suddenly worried about the mammoth runs in these little names? the biggest eye grabber is what happened to arian pharma, working on a novel cancer treatment. like many of the small cap biotech stocks we've recommended in the past. yesterday we saw what happens
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when you play fda roulette and you don't win. the fda halted ariad's clinical trial because it seemed to be causing an increase in blood clots. as a result, ariad lost 66% of its value in a day, falling from $17 to $5 and change. there was a lot of fluff in that stock. i'm not saying that all these other red-hot bioteches are going to follow in ariad's footsteps. but for the small company the fda is an enormous risk. they have a zillion reasons why they might put a clinical trial on hold or not approve the drug when all the data is finally submitted. >> sell, sell, sell! >> and i think we have reached a point where the speculative biotechs reached very little upside. i picked the second nice day of the year to lower the boom. because it's not your ariad. two weeks ago a little biotech
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named achilleon. even though the company addressed all the fda's issues, they still decided not to lift the hold. wow. that was enough to cut the stock in half. it was a full bisection. drugs can still itler fail in stage 3. unacceptable safety issues can pop up. not everything works out the first try either, as it often takes years longer to get a drug approved than originally thought. all the big mac lar degeneration drugs, including regeneron's. they were studied as cancer treatments. most didn't work. older people who took these drugs could see better. so the companies in question to go back to the drawing board, and it took years longer to get them approved for a totally different indication. in short, this is a group with a lot of inherent risk.
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i don't think people are clearly recognizing that risk. of the 140 names that i track in this space, only 15 of them are down this year. 35 of them more than double for 2013. look, guys, it's just too sizzling for me. i mean, i've been there before. i know it feels great. i know no one wants to sell. but man, i got to do this. what is really making me concerned is the bank of america initiation we recently got, a long-time cramer favre nps pharma. here is a little orphan drug developer i have championed. it was $8.24. and a lot of people thought it was expensive at $8.24. it is now at $33 and change. it's up 302% from when i stuck my neck out and told you to buy it. and nps is having a lot of success with a drug that treats short bowel syndrome, allowing patients to digest food rather than needing to be hooked up to iv and fed through a tube 12 hours a day. but bank of america's research where they said the stock was a
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screaming buy, a super-duper buy, and put a $46 price tag on, it's too bullish for me. nps is just one drug on the market. that drug hey struggled to expectations now that they have gotten so high. any catalysts are way down the road. remember, i'm saying i like the company. but the stock is too hot. it's nearly quadrupled since we started recommending it. and now the big brokerage firms are coming in off the sidelines and getting all positive? to me it suggests it's time to ring the register. don't you think the easy money has been made? i'm not saying sell everything. but at least take profits on half your position so you're playing with the house's money. this is my wake-up call to you. same thing goes for all other small cap bioteches that are up huge for this year. the companies are not like celgene who have multiple drugs on the market who have real wonder drugs and deep pipelines. many biotechs don't have a single drug on the market. they're fragile. i don't want you to get hurt. when i start getting them in the "lightning round," i'm going to
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tell you let's rein in the horns a little bit. sell desk, nps, tessaro. these are great companies, but it's time to sell something. especially as we head into the conference coming out a month from now november 7th or 8th. you get a negative abstract, you're going to abstract. please, take some profits. i'm not saying the stocks have going to go down. i hope they go up, because i'm not telling you to sell the whole thing. we have reached the point bring the risk/reward is no longer in your favor. much of the good news about the drugs is already baked in. so here is your new bottom line for biotech. a change of my stance from when the year began. fda roulette is like any other game in the casino. when you're up big, don't keep risking everything by putting all your chips back on the
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table. instead take some of that money off, some of the money you're playing with. leave the rest on, the house's money. go get yourself a nice cashmere sweater, and that way you have recouped your original investment, and any losses going forward will be a lot less painful. i adore these small cap biotech companies. but i hate greed. i hate greedy people. as i say at jim cramer on twitter, and if you don't ring the register on the stocks here, you're being a bad little piggy. stay with cramer. coming up, d.c. drama. >> it's time for these negotiations and this conversation to begin. >> the market went on a wild ride today as the news out of the nation's capital jolted stocks. tonight cramer is turning to homegrown energy solutions to find out how they could keep you flying high for years to come. [ banker ] sydney needed some financial guidance
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and that gives us scale and insight no one else has. investment management combined with investment servicing. bringing the power of investments to people's lives. invested in the world. bny mellon. who needs a survival -- when stocks are roaring? we need a party guide more than a survival guide, don't we? look, nobody likes a party more than i do. i like to dance with the nasdaq lamp shade on my head while i drink biotech sterno out of a trash can. but here is a problem. we aren't out of the woods. even if we get an agreement before the october 17th deadline, no one thinks this is a deal where the republicans and democrats sing kumbahyah my lord
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and bury the hatchet. except of course into each other's heads. that's a reference to a movie. anyway, that's why we're sticking with our survival guide for when we have washington-inspired swoons. and we know that they can crop up with a drop of a hat. have you ever, for example, really, been shock, shock, shock, when there is saber rattling going on when you watch those sunday talk shows? those shows have been responsible for some of the most remarkable dives i've seen yet. or how about when the president throws a press conference. can you recall when one of those ever sent the market higher? i can't. speaker john boehner, he is a one-man put machine. you always want to have a bevy of put options on when he hears a microphone. no one can kill a rally like that guy. he is a bull market assassin, not what you expect from the good old gop. we though when we get a bounce back like today, we see it in the highfliers, and there always seems to be good news to make people want to buy them. stay tuned for that. i'm going to prescribe how those
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stocks rally. but the survival guide has to do with what can be bought into the nastiest of weaknesses, the kinds that are spurred by the breakdowns of talks and the washington mumbo jumbo that so destabilizes renter of stocks. we focused on dividend pairs on monday of we like yield and it gave us a good chance to buy stocks with a very good yield. nice dividends. tuesday we were suggesting you buy the companies where the buybacks were so intense, like time warner and via con. they're almost never weak, expect in washington-related moments. i check mid screen for all of those. holy cow, was that ever the right move. they must have been in there buying with both fists. we've always found that in diversified portfolio, owning a staple or two isn't bad. and that have really come down whom. doesn't like bristol-myers? or maybe procter & gamble? when washington inspires a discount. these stocks are down a lot from their highs. today, though, we're going
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thematic, talking about two groups of stocks that have been the hottest -- relentlessly hot i should say, in the stock market. stocks that are only cooled momentarily by d.c. hatred. but get right on otrack soon after. i'm talking about the fire in straw coalition of aerospace and oil. don't these sound like strange bedfellows? whenever the oil goes up, don't the airlines go down? well, got it to tell you something. i'm not talking airlines. i'm talking aerospace. and these go hand in hand. aerospace is booming in part because new planes dramatically reduce fuel consumption. given jet fuel can consume up to 40% of an airline, every single carrier needs new planes to cut that bill. because alas, oil has just stayed -- i always use this cliche, stubbornly high, which is the second part of the coalition, oil. the united states is enjoying an energy renaissance -- all day wanted to pronounce it that day -- that occasionally gets talked about.
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certainly not in washington. washington is plain old fossil 2350u8, including even cleaner burning natural gas. we know this because boone pickens went down with a good plan and no one really listened to him. but the corporations, no. they don't care. they're about making money for you. they see the world price of oil being sticky and recognize with new technology they can find oil for as little as 10 to $12 a barrel, but it's made in america. it's a bonanza. and the stocks have been some of the best performers imaginable. given that oil didn't come down during the great recession of europe, given that oil didn't come down during the slowdown in china, it certainly isn't going to come down with these two regions copping back online. make no mistake about it, those two are the drivers, not our country. where conservation has cut back on energy use to the point where our refiners are flooding the world with gasoline owing to a decline in the market here. and some quirky rules like the jones act that make it easier to ship oil overseas than to ship to it the east coast and louisiana where we actually need it. how do we play these two big
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themes? let's start with aerospace. one thing have i learned from my more than 34 years of buying stocks is never be too clever. sure, there are ancillary aircraft plays. we know that. companies that specialize in landing gear, fuselages, even seats and windows. plane screws. if you want to play this multi-year cycle, you invest in the engineering marble that is boeing. here is a company with a 20-year plan, 20 years, one that has the hottest plane in the market, dreamliner, and i don't mean hot from the engine, i mean hot from the sales, like hot cakes. one that is a workhorse plane that continues to spew cash, and that is the 737, and one that is the envy of the industry. the dreamliner tends to last seven years with each year getting more and more lucrative as the kinks of the assembly get ironed out. we're in year two. we know from klaus kleinfeld of alcoa that makes the screws --
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by the way two million screws in each plane. can you imagine? man, my arm is tired there are 10,000 planes on back order. could there be a better place to run to when everyone else is running from stocks than boeing? i don't think so. how about oil? first, let's talk about what is not working, the majors. last night chevron preannounced a shortfall because of refining issues. exxon misses numbers because of production issues. what matters to oil matters to oil stocks, growth. and only the independent companies visit. they go nuts for it. we saw this very day with antero resources. why? it's got 320,000 acres in the marcellus shale and 102 acres in utica shale whom. looks like antero that now seems cheap in comparison to the deal? how about gulfport and cabot. gulfport and cabot.
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the production growth are amazing. 45% for g-port. particularly new england, by the way, they still import a lot of crude oil to heat how many times there. that's a ready place for this fuel. two years ago we went to the bakken shale of north dakota and spoke to continental resources. oh, he talked a big game of growth. he delivered. the stock is still cheap. moving south to eagle ford shale, that's about eog resources. mark papa, many cases the best field in the country. then near denver. our growth play is noble energy, which has amazing properties in the aegean sea. ones that are so fabulous it could hold the key to european energy independence from russia. there are two parts we're playing, the del oro basin and sim rex, xec. and best for last, the sprayberry would have camp. i love cimerex.
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but pioneer, that's right, the world. we know it looks like joy has broken out in washington. super. but given that the gop and the democrats won't give us another chance with their fighting, i call that fanciful. this is a injury rigged piece. we told you not to panic because you couldn't get out and back in again. next time you get hit, i need you to think boeing and the oil and gas growth, gulfport and utica, cabot oil and gas in the marcellus, nobel, and pioneer in the sprayberry wolf camp. these all got campered in the sell-off. it's the only time this year. do you know you got that kind of opportunity? and washington gives us another one. scott in illinois. scott? >> caller: good afternoon, jim. big boo-yah from byron, illinois. >> i like that. what's on your mind? >> caller: well, you know, earlier in the week, you talked about southern electric and dominion republic. and i'm a big fan mainly buzz of illinois.
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just wondering what you thought about illinois. >> i never liked commonwealth ed, and i never reekly liked philly elect. when they called themselves exelon, i continued to stay negative. i like letter d, dominion more than i like exelon. exelon is not excellent. can i go to ivan in new york, please? ivan? >> caller: hey, jim. how you doing, jim. >> real good, ivan. how about you? >> caller: good. i'm going to give you a new york knickerbocker boo-yah. >> i'm a net ten-game package boo-yah. yeah, i got it. it's cool. they're really cheap. >> caller: i got a question about a recent ipo, man. >> okay. >> caller: it's scary. after recent market activity took a little wallop out formula, xlrn. >> celgene has a big stake in that. we liked them, but i got to tell you, today is the day where i'm pulling in my biotech horns. and while celgene may like it,
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we think it's gotten too hot for this guy. it's a nine-second egg that has been left on for ten seconds on the red-shot griddle. we told you not to panic. the survival guide. and cimarex. stay with cramer. tomorrow, kick off the trading day with "squawk on the street." live from post nine at the nyse. >> do you think he is tackle about the debt court of appealing? does he have the crossbow? is he talking cabela's? >> it all starts at 9:00 a.m. eastern. customer erin swenson ordered shoes from us online
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hey, have you downloaded zeebox yet so that you can join the entire cramerican cohort and get the full "mad money" experience? good! wait, you haven't? what are you waiting for? on the web, on your phone, on the tablet, on the go! download zeebox and join the conversation. it actually is really cool. i look at it every day.
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we're doing some great stuff on zeebox. you got to get there. now it is time, it is time for the "lightning round." he said -- >> buy, buy, buy! >> sell, sell, sell! >> and then the "lightning round" is over are you ready, skee-daddy? mike until new jersey. michael? >> caller: boo-yah, professor. >> yo, yo, what is up? >> caller: gmcr, 25% down. what's going on? >> everyone keeps trying to -- all the shorts keep ganging up on this. and you know what? when they do that stuff and then the chart breaks down jourk a head and shoulders pattern. >> sell, sell, sell! >> i can't take it. i don't need the pain. it's too painful. i just want to use my keurig. i don't want to own the stock. steve? >> caller: jim, imvm. >> it makes sense. the stock has been red hot. good as it is, i do like the
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gyroscopes they have. they're really cool. let's go to allen in florida. allen? >> caller: i want your opinion on lynnette? >> why lynnette when i can give you perrigo? perrigo under 30 to buy. let's go to tim in california. tim? >> reporter: hey, cramer, i'm long on gd. >> i like general dynamics. general dynamic veels strong. i like the bounce back. what's happening? >> caller: i was wondering about canadian natural resources, you know? >> well, steve, canadian nat, i got all these great oil companies and canadian nat -- no! how about eog? how about pioneer? both of those are better than canadian nat. can i go to jerry in washington, please? jerry? >> caller: jimmy. >> what's shaking? >> caller: what's shaking? a big husky seahawk boo-yah from
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olalla, washington. >> i just picked up percy harvin. >> caller: he is going to kill everybody. >> go ahead. >> caller: i feel like i'm talking to an old friend here, which are. >> caller: your probably getting tired of hearing this, but thank you for all you do for us little people out here. >> never get tired of hearing it. i run on fumes every single day. what's up? give me one. >> caller: one more thing. one more thing. before i give you my stock, good luck to your eagles when they play my seahawks because they're going to need all the help they can get. huh? >> okay. that's nice to talk to you, jer. tom in new york, tom! just kidding. go ahead, jer. i cut jer. hey, easy come, easy go. jerry, are you here? no. i'm going to dan in wisconsin. he is going to hit me with some green bay nonsense. hey, dan. >> caller: hey, green bay. i grew up, it's not nonsense. i know this stuff. >> yeah.
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>> caller: my stock is -- >> i'm sorry, what? >> caller: my stock is 3m? >> 3m? now if there you go. i think that 3m -- >> buy, buy, buy! >> that ceo is dynamite. and inga likes hockey. he is not a green bay fan and not a viking fan, and i don't blame him. tim in new york? >> caller: cramer, this is tim from new york. my question is for emerald oil. >> why do you have to go to the emerald isle when you go to the niobrara? >> buy, buy, buy slaps. >> ais the conclusion of the "lightning round"? >> the "lightning round" is sponsored by td ameritrade. coming up, the right fit? while investors put retailers back on the rack, the company behind clothing brands fors between to working women appears to be fashionable again. can it stay in style? cramer is trying on ascena
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suddenly conventional wisdom has been turned on its head. i'm talking about the power retailers. here is an industry that look like a real dog for months as it seemed like people were spending their disposable income on renovating their homes and hard goods. but then ascena, the parent company of a host, dress barn, catherine's, lane bryant reports a blowout quarter a few weeks ago. and then to make sure we got the point, yesterday management held a pretty darn positive analyst day, although the company was conservative with its guidance, which makes sense, considering the damage the politicians could do to retail if they don't deliver on the newfound talk of raising the debt ceiling. they ended up being a little too optimistic about their targets and the stock got hit. this year the goals are more moderate. the retail verse spoiled us good earnings like gap and l brands that are now disappointing us. let's check in with david jaffee, the president and ceo of ascena retail group to get a better read on his company and to find out what is going on not just in apparel but hard goods.
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welcome back to "mad money." good to see you, sir. >> thank you, jim. good to be back. >> we need you. we're confused. you've done a lot of deep dive. we see hard goods doing well. l brands down, gap stores will be down tomorrow. can you give us a sense of why ascena is not seeing that? are you in a different business? >> i don't know if we're in a different business, but i think we're positioned a little differently. >> okay. >> i think you have a little bifurcation. we have the real low-end guys, the cheap guy, the value guys like tj maxx and ross that have been doing really well, the burlington deal just came out. >> people love that. >> terrific. and then at the high end some of the really good guys like the urbans have been doing really well. but lot have been hit because people are pulling back a little bit. they're saying maybe i don't need that extra outlet. >> are they pulling back or -- >> some are trading down. >> you're able to track that somehow? >> we are. there are different ways we track who our customers are, the new customers are.
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and a lot of it is anecdotal. but some of it is through applications for credit card or our loyalty programs. and it seems like we're getting a little bit of a benefit from people trading down. and at the same time, you're getting people trading even further down to the tjx's. and that's why they've been performing so well. >> why is best buy hitting a high? you don't need hard good stuff, do you? it's discretionary. >> i think what we have seen since maybe last spring is kind of this split. people have been saying, gosh, i haven't replaced my car. auto sales are way up. home, home furnishings. home depot has been doing great. >> right. >> and i think the same thing with best buy. people are getting new flat screen tvs, or whatever. and that's been hitting the industry in general apparel, software, restaurants. we've benefitted in our world because we're a little more moderate. >> across the board. you don't break the bank when you go to your stores. >> and we always have some special or promotion to try to draw the customer in so she
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knows she is getting a good deal. >> also, in the last year, you've been able to rationalize. it looks to me if you have had to reposition, that maybe it wasn't as good -- maybe it didn't initially pan out. but now it seems to be panning out. >> we always said it's going to be laerm. >> you did. here you said that too. >> it was wonderful and we were excited to buy it. we knew we had a lot of integration work to do, which we're still doing. >> that's the back office stuff. and on the front end it was clearly a turn around at the lane bryant and catherine's. and i'm happy to see they're well on their way, and we're very optimistic about their future. >> given what you have seen about where people are, gently going down, i don't want to say trade down because your merchandise is as good as the other guy's. >> thank you. >> is it just accelerating from what is happening in washington? the last four weeks, do you actually get a pickup versus the other guys? >> washington, everybody is that going to hurt retail sales? it ain't going to help. >> okay. that's what i say.
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at the top of my show, i was talking about how, you know what? there is no way you can raise numbers off this washington. >> that's right, that's right. i think the furlough workers, there is a tiny tiny percent. but what it does is it sends this chill through consumer confidence. so people are just going to say i don't know how this is going to turn out. maybe i'm just pull back. so until there is that confidence back, and consumer confidence still hasn't picked back up to the prerecession days. >> right. >> we need to see that come back up. >> are you getting when you're ng going from the other store, are you seeing customers that railroad going to jcpenney, because jcpenney did that repositions, they have a lot of stores and seem to not doing that well. >> jcpenney certainly has had a rough period. >> right. >> we have not seen as many of those customers as we would have like, frankly. >> okay. >> but we do think that that has created a little more turmoil in the marketplace, that people like tjs benefit. >> in the time since we've been getting together, it looks like the website, like ecommerce is starting to pan out. >> oh, yeahit's doing great.
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for all the brands. >> and doing coupons where -- deals, deals online. >> sure. and also, we do things where some of the pure plays can't do. you can buy online and ship for free to is the store. >> right. >> and then if it's the wrong size or you want something to match it, you can do it. same thing. if we don't have what you want in the store, we can order it for you from some of our brands in the store and have it delivered to your home or back to the store. >> i'll tell you. this was a terrific analyst meeting. the presentation is so easy to read. please go there. it is not a difficult presentation. you'll understand what i'm talking about. why this is the right kind of retailer for this environment. it's really, really right. david jaffee, the president and ceo of ascena retail group. you know all their brands. go do some learning about them, because they're real good. stay with cramer. new hope in washington. >> the ice is cracked. the two sides are getting together. >> new opportunity to get the deal done. >> all of the science are that they are moving toward a deal with the president. >> however, this is very far
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from a done deal. >> it's not just about this one-day move. this could be something that sets us up for good things going forward. >> second best rally of the year. the market's message seems to be mr. president, take the deal. >> rise above the debt threat. [ banker ] sydney needed some financial guidance so she could take her dream to the next level. so we talked about her options. her valuable assets were staying. and selling her car wouldn't fly. we helped sydney manage her debt and prioritize her goals, so she could really turn up the volume on her dreams today...
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yelp, linked in. twitter, it's not even public, but it still went up. it's just the way it works. now, i have no idea about the staying power of the move if there is no agreement on the debt ceiling overall. but the medicare card now being played by the democrats, there is no deal, well, there will be no checks sent out. and that would cause a dramatic contraction of the economy that would take everything down, including these economically insensitive stocks. but these stocks are going to be mexican jelly bean bounce backers. why is that? first, when things get rough, aggressive managers lose their appetite for the risk. i used to cover or buy and sell stocks for these kinds of managers when i was a broker at goldman sachs. i used to detect their moves when i was a hedge fund manager. they almost all came in at once when the market got ugly like it did on monday, and they dumped their favorite eckes in one fell swoop. you know what they do? after that dumpster dive we get the shorts swarming in. they smell blood in the dumpster. they have waited for this moment hen the highfliers all trade together as i often tell you am i diversified day. and they're about to crack.
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when they see the declines, the short sellers take action. they do it in first ways. first they buy puts and then common stocks are shorted. they're aggressive about it. they're looking at charts. they're talking to the desk. they have good intel that the sellers are back and still trying the get out. second day is sensational for the shorts. they win huge. the third day the short sellers, they get real cocky. they seasons that the longs are panicking and headed for the hills. but at the exact same time this happens, the longs say wait a second, hey, this sell-off has become ridiculous. the downside is overdone. meanwhile, other money managers who have said if we every got a 5 to 7% pullback. that would put their money to work, they come in and buy. >> buy, buy, buy, buy, buy, buy, buy, buy, buy! >> midday through the third day you get the completion of the decline. they pounce. so starts the third day reversal day. the shorts are caught offguard. they press today far. meantime, the longs know the drill. the exact same time the smartest short sellers, the managers started shorting on monday
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afternoon, they hear the footsteps. they come in and cover their short positions even more aggressively. then you got a reversal in the vix, the volatility index. it's a pincer move. when i was on the desk we used to call it castle ring. that's german for a cauldron, an encirclement that cooks the shorts. today the shorts see the game other and have to cover in the cycle of decline. i know we could absolutely have real turmoil again as we get closer to the real deadline where the checks don't come out. the high-flying stocks are back on course, at least for now, as they always seem to be after the cycle of pain runs its course. get used to the gambit. believe me, your going to see it again. maybe soon. stay with cramer. so i c
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don't forget. retailers not so good. banks start tomorrow. don't expect them that good. all i'm saying is don't be greedy. you have been given a reprieve by the people in washington, but not from the earnings disappointments. i like to say there is always a bull market somewhere. i promise to try to find it for you just right here on "mad money." i'm jim cramer, and i will see you tomorrow. big news out of washington tonight. where house republicans have offered president obama a clean six-week extension of the nation's debt limit. plus the deal would not necessarily end the government shutdown. the latest reports say president obama has not yet accepted the offer. the white house meeting with the gop have just wrapped up. we will speak with two of those participants right here on the show. by the way, on wall street, whoa! investors responded with a bang. a 323-point explosion pour the dow. this is a special, dramatic, breaking news edition of the

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